Expensive transportation to Black Sea and Mediterranean Sea ports makes Kazakh grain too expensive

Business Materials 19 August 2009 15:59 (UTC +04:00)

Kazakhstan, Astana, August 19 / Trend , K.Konirova /

The cost of delivery of Kazakh grain to the Black Sea Port of Batumi (Georgia) is $70-75 per ton, a source at the largest private grain company, who wished to remain anonym, told Trend special correspondent.

"The cost of delivery of Kazakh grain, for example, with elevators of Qostana region [one of the main grain-sowing regions in northern Kazakhstan] to the Black Sea Port of Batumi in Georgia is $70-75 per ton. Services of port for transshipment of grain is $4 to $5 per ton," the same source said.

He refused to report on the total volume of Kazakh grain supply to the Port of Batumi.

According to the experts of JSC Food Contract Corporation, in the coming years, Kazakhstan will redirect its grain supply to the south - to the countries of Central Asia, Afghanistan and Iran.

"Expensive transportation to the Black Sea ports and the ports of the Mediterranean Sea makes the Kazakh grain too expensive and thus less competitive, which makes its sale difficult on the world market," said the representative of Corporation.

Kazakhstan has already built a grain terminal in the port of Baku on a parity basis. In the end of September this year, will be launched the first stage of construction of grain terminal in the Iranian Port of Amirabad.

In Amirabad Grain Terminal JV, equal shares are owned by Kazakhstan JSC Food Contract Corporation and the Iranian Behdis Tedzherad Albor. Total project cost is $20 million.

The annual capacity of the terminal will amount to 500,000 to 700,000 tons of grain with one-volume storage of 50,000 to 63,000 tons. Subsequently, its capacity for grain transshipment can be extended up to one million tons per year.

Amirabad Grain Terminal JV was established by the Kazakh and Iranian sides last year specifically for this project. Its main goal is to provide high-quality Kazakh grain to Iran, as well as transit Kazakh grain to neighboring countries and carry out swap-operations in the markets of third countries through the southern ports of Iran in the Persian Gulf.

The construction of the terminal is scheduled to be completed in December 2009. Amirabad Seaport is the only Iranian port in the Caspian Sea, which has a railway branch with an access to the main network. In addition, the port is located on the territory of free economic zone and takes first place amongst the Iranian ports for transshipment of goods via North-South corridor.

Construction of the grain terminal will provide infrastructure to consolidate and expand the presence of Kazakh exporters on the perspective market of Iran and markets of the Persian region.

According to the specialists of Food Contract Corporation, the company plans to consider the question of creating a supply chain and develop an opportunity to build grain terminal in another Iranian seaport - Imam Khomeini.

"This project was approved by the Iranian side," said the company.

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